Is FDA’s Interim Policy on Section 503B’s So-Called “Bulks List 1” Illegal? Did FDA Overstep its Statutory Authority? The U.S. District Court for the District of Columbia May Soon Decide….

On October 26, 2017, Par Sterile Products, LLC and Endo Par Innovation Company filed a Complaint in the United States District Court for the District of Columbia against the Food and Drug Administration. At the heart of the Complaint is FDA’s Interim Policy addressing compounding using bulk drug substances by outsourcing facilities pursuant to Section 503B of the Federal Food, Drug, and Cosmetic Act (FDCA) (see earlier posts on FDA’s Interim Bulks Policy (here, here, and here). Generally, FDA’s Interim Policy permits outsourcing facilities to compound formulations using bulk substances that are on FDA’s “Bulks List 1.” FDA describes its Bulks List 1 to include those substances nominated with sufficient supporting information for FDA to consider them, and they do not appear on any other list. FDA’s Interim Policy states that it intends to finalize the policy via the statutorily required notice and comment rulemaking, but it implemented the Interim Policy to permit compounders to provide medications and not disrupt patient access pending completion of the mandated rulemaking process. The Complaint alleges, however, the FDA’s rulemaking concerning its Bulks List and FDA’s creation of what the Complaint deems the “Clinical Needs List” was moved to “inactive” status and “indefinitely” postponed. Complaint ¶ 50.

Not so fast, say plaintiffs. They allege in their three-count Complaint that FDA’s Interim Policy violates the Administrative Procedure Act. Among other things, plaintiffs allege that Section 503B requires that, to add a bulk drug substance to Bulks List 1, FDA must make a “record-based determination” about a clinical need for compounding of that particular bulk substance pursuant to specific statutory notice and comment procedures. (Complaint ¶ 88 (citing 21 U.S.C. § 353b(a)(2)(A)(i)). Plaintiffs also claim that Section 503B(a)(5) also prohibits compounding “essentially copies” of approved drugs. By compounding drug products using the bulk ingredient vasopressin (which FDA added to Interim Bulks List 1 in July 2017), Plaintiffs allege FDA is permitting not only compounding in violation of the statutory directive to engage in appropriate rulemaking proceedings concerning the list, but is also permitting compounders to compound “essentially copies” using that bulk ingredient without a requisite “clinical difference” determination for the particular compounded vasopressin product. Plaintiffs’ three counts allege FDA is acting in violation of the APA because it has no legal authority to permit the marketing of an unapproved drug, and is not free to “create its own exceptions” via its interim bulks nomination policy to not engage in notice and comment rulemaking. They allege that the Interim Policy is “final agency action,” not a lawful exercise of FDA’s enforcement discretion, and is inconsistent with the plain langue of the FDCA, including the Act’s drug approval requirements. In addition, Plaintiffs allege that FDA’s review of the July 2017 vasopressin nomination was arbitrary and capricious concerning, among other thing, the failure to appropriately address the clinical need for the bulk substance prior to its inclusion on the list. Plaintiffs also seek attorneys’ fees. Note that Section 503B does specifically permit FDA to promulgate an “Interim Policy.” See Section 503B(c)(3)(A). But that interim policy provision does not cover bulk substances that may be used in compounding: Congress limited that statutory provision to include only those substances in subsection (a)(6) of section 503B – those that present “demonstrable difficulties” for compounding.

There are several (somewhat familiar) issues that make this case especially interesting for those following the ongoing drug compounding saga since the events leading to the enactment of the Drug Quality and Security Act in November 2013. First, FDA approved vasopressin pursuant to what press accounts have described as a “little known safety program:” FDA’s so-called “Unapproved Drugs Initiative.” In other words, use of vasopressin is far from a “newly used” drug, notwithstanding its relatively recent FDA new drug approval. (See here – “Thanks at least partially to the FDA program, the price of vasopressin, a drug useful in cases of cardiac arrest and often found on crash carts, has risen 10-fold.”) Although FDA’s various guidance documents on compounding “essentially copies” explicitly do not permit copies based on the price of the approved drug alone, drug manufacturers’ “significant” (and well-reported) price hikes of long-used drugs such as vasopressin (and colchicine, pyrimethamine, and hydroxyprogesterone) likely creates an opportunity for compounders to formulate a product that they may demonstrate is in fact not essentially a copy of the approved drug — at a significantly less expensive cost to the health care facility or provider. Second, although the present litigation may ultimately prove successful and change the way FDA considers bulk substances for use in compounding pursuant to Section 503B, the Complaint makes no mention of compounding under Section 503A, which is compounding by “traditional” compounding pharmacies or physicians pursuant to individually identified patient prescriptions. Unlike Section 503B outsourcing facilities, these compounders may indeed compound formulations from bulk substances using components of approved drug products. Thus, because vasopressin – as a result of FDA’s relatively recent approval – is now a “component of an approved drug product,” the thousands of compounding pharmacies across the United States may compound using that ingredient, so long as they do so lawfully and in accordance with the other provisions of Section 503A.